Turkey has established sovereign wealth fund, with a primarily
domestic focus. The fund is expected to be worth 200 billion TL and
is intended to generate long-term and low-cost finance for
strategic, large-scale investments, contributing to Turkey's
development. The Turkish government prioritized the fund's
establishment in recent years in order to provide foreign financing
for planned infrastructure projects. The fund is expected to be
ranked in the Top 20 sovereign wealth funds globally, based on the
value of announced assets under management.
The Law on the Establishment of Turkish Wealth Fund
("Law") was published in Official
Gazette number 29813 on 26 August 2016.
The Law incorporates a wealth fund management company
("Fund Company"), responsible for
establishing and managing the Turkish Wealth Fund
("Wealth Fund") as an umbrella fund for
other subsidiary funds to be incorporated in the future.
The Fund Company is empowered to undertake:
Sale and purchase of:
Shares in Turkish or foreign
Shares and debt instruments issued in
Turkey or abroad.
Capital market instruments issued on
the basis of precious metals.
Lease certificate and
specially-designed foreign investment instruments etc.
All types of money market
Valuation of real estate and real
estate-based rights and intangible rights.
All types of project development,
project-based fund raising, providing external project loans, and
procuring sources by other methods.
Realizing business and financial
operations in Turkish and international markets.
Participating in domestic investments
and investments in international fields, together with other
countries or/and foreign companies.
The Fund Company has an initial share capital of TRY 50 million,
covered by the Privatization Administration. It will operate under
the Prime Ministry and the Prime Minister will appoint the Fund
Company's board members and general manager.
A large list of assets are already planned to be transferred to
the Fund Company:
Institutions and assets in the scope
of privatization program, and cash surplus from the Privatization
Surplus income and assets of state
institutions to be determined by Council of Ministers.
Finance and sources procured by other
methods, from domestic and global money and capital markets.
Although the Fund Company completely state owned, it will
operate like an ordinary joint stock company. Therefore, it will be
subject to private law provisions, audited in line with independent
audit standards, and be required to follow professional management
policies. Accordingly, corporate governance principles under the
Capital Markets Law (Law No: 6362) will apply.
The Wealth Fund, Fund Company, and all other affiliates will be
exempt from various taxes and fees. These exemptions include
corporate tax, stamp tax, municipal taxes, real estate tax,
resource utilization support fund, banking and insurance
transaction tax, capital markets fees, and court and enforcement
For financing arrangements, the Wealth Fund's assets can be
pledged, mortgaged or otherwise encumbered. However, other than
security interests granted for financing arrangements, the Wealth
Fund's own assets cannot be pledged, attached, or included in
Please see this link for the full text of the Law
(only available in Turkish).
Information first published in the
MA | Gazette, a fortnightly legal update newsletter produced by
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