Turkey: Incorporation Of Private Pension Companies And Funds


The private pension system is regulated mainly by the Private Pension Savings and Investment System Law No. 4632 ("Law"), the Regulation on the Incorporation and Working Principles of Pension Companies published in the Official Gazette, dated 08.01.2008 and numbered 26750 ("Regulation"), and the Regulation on the Principles regarding the Incorporation and Operation of Pension and Investment Funds, published in the Official Gazette dated 28.02.2002 and numbered 24681 ("Fund Regulation").

A private pension company ("Company") shall commence operation upon obtaining the required approvals from the Undersecretariat of Treasury ("Treasury") and the Capital Markets Board ("Board"), and shall establish a fund for the collection of contributions in compliance with the pension agreements executed with the participants. The contributions collected by the Company are put to use through a pension investment fund ("Fund"). The Fund consists of the assets put together with the purpose of managing the contributions collected from the participants, which are monitored in private pension accounts on behalf of the contributors within the scope of the pension agreement.

The Company may also obtain an operating license in the branches of life insurance and accident insurance. If the Company operates in any branch other than the pension branch, accounts shall be kept separately for each branch.


Permission for Incorporation

The application for permission to incorporate shall be made to the Undersecretariat and permission is granted by the Ministry. The Company seeking a license to establish is subject to certain requirements; it must:

  • be a joint stock company.
  • have an area of activity limited to the subjects stipulated in the Law.
  • have articles of association that are in compliance with the Law.
  • issue share certificates as registered shares to named persons and all of the share certificates must be issued in return for cash.
  • The real person founders of the Company and the real persons having the right to manage and audit legal person founders shall:
    1. not directly or indirectly hold a share capital of ten percent or more in any banker, banks, insurance companies and/or other institution operating in monetary and capital markets that has been subject to liquidation;
    2. not have their activities suspended, in whole or in part, permanently or temporarily, for a period of one month or more in the one year period prior to the date of application for incorporation in accordance with the applicable laws;
    3. not be bankrupt or have declared bankruptcy; and shall not have been sentenced to any heavy imprisonment or to imprisonment for more than five years due to infamous crimes such as simple or aggravated embezzlement, secret conspiracy, extortion, bribery, theft, swindling, forgery, breach of trust,, smuggling, conspiracy in relation to public tenders and purchases, money laundering, tax evasion or attempted tax evasion, or any other such crimes as stipulated under the Law.
    4. have the financial capabilities and reputation which a founder should be reasonably expected to have.
  • have a nominal capital of at least twenty trillion Turkish Lira and at least ten trillion Turkish Lira of capital paid-in; the remainder of which must be paid within a maximum period of three years.
  • ensure that at least fifty-one percent of the Company capital is held by legal persons with the adequate knowledge and experience about financial markets. The amount of capital required for the incorporation can be increased by the Undersecretariat, provided that it does not exceed an amount equal to twice the Wholesale Price Index established by the State Statistics Institute.

Company Organization and Bodies

There are also certain requirements which need to be fulfilled by the members of the Board of Directors of the Company. In this context, the Board of Directors must consist of at least five persons. The simple majority of the Board of Directors must have obtained at least an undergraduate degree and must have working experience in the areas of insurance and business management and administration.

The general manager, the deputy general manager and others executives who are authorized signatories are also required to have at least an undergraduate degree. General managers must have at least ten years work experience. Deputy general managers and other executives who are authorized signatories and hold offices equal to or higher than that of the deputy general manager must have at least seven years work experience.

Operation License

The Company must obtain an operation license ("License") in the pension branch in order to start its activities after incorporation. The License is granted by the Undersecretariat. The application criteria are as follows:

  • the Company must have devised its operation in a manner that will allow it to serve at least one hundred thousand contributors within two years;
  • the arrangements foreseen in the system design and business plan shall have been made;
  • human resources, the physical site, and the technical and administrative infrastructure shall be compatible and function in complete harmony.

The License application and the required documents must be provided and complete within one year of the incorporation date; otherwise the permission of incorporation shall automatically become invalid. If the Company does not apply to the Board to establish a Fund within three months after obtaining the License, or if the application is rejected, both the incorporation permission and License shall automatically become invalid.

Amendments to the articles of association, Transfer of shares and assets, Mergers

Amendments to the articles of association, the transfer of shares and assets and mergers are subject to permission. Registrations without any permission are deemed invalid.

The approval of the Undersecretariat is required to amend the articles of association. Without approval, amendment drafts cannot be negotiated in the general assembly and cannot be registered to the trade registry. The following are also subject to prior consent from the Ministry (to which the Undersecretariat of Treasury is attached):

  • Transfer of shares granting privilege for appointing members to the board of directors and auditors or granting a usufruct right;
  • Transfer of all the company's assets and liabilities to another pension company or the merging of the company with one or more pension companies;
  • The direct or indirect transfer of capital shares of the legal entity shareholders holding ten percent or more of the company capital.

Permission will be granted for share transfer transactions on the condition that the new shareholder fulfills the same set of criteria as the Company's founders. In the event that the capital shares that determine the control and management of the legal entity are owned by another legal entity, these provisions shall be enforced until real person shareholders are determined.

The following share transactions are subject to the permission of the Prime Ministry:

  • obtaining shares representing directly or indirectly 10% or more of the capital of the Company by a real or legal person;
  • obtaining a share pledge and right to vote exceeding the ratios of 10%, 20%, 33% and 50%;
  • share transfers resulting in a capital share of the shareholders which exceed or fall below 10%, 20%, 33% and 50% of the company capital.


ThePrime Ministry may require the Board of Directors to take certain actions in the event that the rights and benefits of the participants are endangered by Company practices, the Company neglects the obligations arising from the agreement or the financial structure of the company is weakened in a way that may endanger the rights and benefits of the contributors. Once such actions are required by the Prime Ministry, the Company is obliged to prepare a recovery plan within ten days following notification and must notify the Undersecretariat of said plan.

Should the Company fail to take the actions provided in the recovery plan on time or if there is no improvement in the present condition although the required actions have been taken, the Prime Ministry is entitled to require the realization of heavy measures such as the declaration of the Company as bankrupt, the cancellation of the operation license and the transfer of the funds as deemed appropriate.

Pension Investment Fund

The Fund is not a legal entity and it cannot be established and used for purposes and obligations other than those stated in the Law, the pension agreement, the fund by-laws and the related legislation. The fund is established for an indefinite period of time. The Fund's assets cannot be subject to pledge, provided as a guarantee for transactions other than those regarding the portfolio and cannot be seized by the third parties.

In order to establish a fund, the Company should apply to the Board with the Fund by-laws, the pension agreement and other documents as required by the Board. The Fund by-laws is an agreement between the contributors and the Company, the portfolio keeper and the portfolio manager which contains general provisions and regulates the keeping of the portfolio in accordance with the principals of fiduciary ownership and the management of the portfolio in accordance with the provisions of the proxy agreement.

The portfolio is managed by portfolio managers within the framework of the Fund by-laws, the pension agreement and related legislation.

For the establishment of the Fund, the fund by-laws shall be registered with the trade registry where the Company is registered within six business days following obtaining of the approval document received pursuant to the approval of the Board and shall be published in the Turkish Trade Registry Gazette ("TTRG").

In order for the Fund to commence its operation, an application shall be made to the Board within six months after the Company receives incorporation permission, along with a request to register the contribution documents and other required documents. If the application is not made on time, the Fund by-laws are removed from the trade registry.

If the approval of the Board is obtained, at least three Funds consisting of different investment instruments as determined by the Board and which have different portfolio structures will be established. At least 5% of the capital will be registered with the Board for each Fund and the established Fund will amount to the shares that are 5% of the capital. In the event that the total amount of shares that are provided by the contributors exceed the amount of the registered shares, an application shall be made with the Board for the registration of the excess shares with the Board.

The Board shall collect a registration fee, which shall not exceed 0,005% of fund's net asset value, upon receiving the approval of the Undersecretariat by the last business day of the aforementioned three-month period.

The accounts and the transactions of the Fund are subject to independent audit at least once per year.


The private pension company and its Funds are subject to the regulation of the Undersecretariat and the Board upon receipt of a license of establishment. The requirements which need to be fulfilled by the company during incorporation must be maintained at all times with an end to maintaining continuity and reliability with respect to the rights of the contributors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.