Turkey: Turkish Wealth Fund

Pursuant to the Law on the Establishment of the Turkish Wealth Fund Management Joint Stock Company and on the Amendment of Certain Laws numbered 67411 ("Law No. 6741"), the purpose of the Wealth Fund is to contribute to the variety and to the depth of tools in the capital markets, to bring domestic public assets into the economy, to provide external resources, and to take part in strategic and large-scale investments. In this Newsletter article, the establishment and the characteristics of the Wealth Fund are analyzed.

In General

The Wealth Fund has been established by the Wealth Fund Joint Stock Company ("Company"), based on the powers granted by Law No. 6741. The procedures and principles on the structure and functioning of the Company have been adopted by the Decision, numbered 2016/9429, on the Entry Into Force of the Decision on the Structure and Functioning of the Turkish Wealth Fund Management Joint Stock Company2.

Pursuant to Law No. 6741, the Company establishing the Wealth Fund and the sub-funds related to this fund is subordinated to the Prime Ministry, and is subject to private law provisions (Art. 2/1).

The Establishment of the Company, Area of Activity and Management

Law No. 6741 sets forth the principles on the establishment, management and activities of the Company in order to establish the Wealth Fund and the sub-funds related to this fund. The founding capital of the Company, which amounts to fifty million Turkish Liras, is supplied by the Privatization Fund. The shares representing this capital paid in full belong to the Privatization Administration Directorate. The shares are nominative shares.

Pursuant to Article 2 of Law No. 6741, the Wealth Fund and the sub-funds related to this fund shall be established by the Company. Within the scope of Article 3/1 of Law No. 6741, the Wealth Fund shall be established through the registry of the Wealth Fund Bylaws with the trade registry. Additionally, if deemed necessary, sub-funds related to the Wealth Fund may be established. The establishment, structure, management and activities of these funds shall be determined pursuant to the Wealth Fund Bylaws and articles of association of the Company.

The establishment of the Company was on August 26, 2016, was registered on November 7, 2016, and published in the Turkish Trade Registry Gazette dated November 15, 2016 and numbered 9198. The articles of association of the Company was registered on December 22, 2016, and was published in the Turkish Trade Registry Gazette dated December 28, 2016 and numbered 9229.

Pursuant to Article 2 of Law No. 6741, the Company may engage in the activities below by taking into consideration the objectives set forth under the strategic investment plan and liquidity, investment, risk and profit preferences:

  • Sale and purchase of the shares of domestic and foreign companies, the shares and debt instruments of the issuers established in Turkey or abroad, the capital market instruments issued based on precious metals and commodity, fund participation shares, derivative instruments, lease certificates, immovable certificates, specially designed foreign investment instruments and other instruments,
  • All kinds of money market operations,
  • Development of immovable, and rights on immovable, and all kinds of tangible rights,
  • All kinds of project development, fund raising based on projects, foreign project credit extensions, and resource procurement through other means,
  • Realization of any kinds of commercial and financial activities in domestic and foreign primary and secondary markets, participation by the Company in domestic investments and foreign investments conducted by other states and/or foreign companies.

Pursuant to Article 2/7 of Law No. 6741, the board of directors of the Company shall be composed of at least five members. The chairman and the members of the board, and the general director shall be appointed by the Prime Minister. It is required that the chairman and the members of the board, as well as the general director, each have at least five years of experience in at least one of the areas of economics, finance, law, treasury and banking.

Resources of the Wealth Fund and Assets and Rights Transferred to the Wealth Fund

Article 4 of Law No. 6741 lists the resources of the Wealth Fund and enables the Wealth Fund to obtain funds outside of these funds, from domestic and foreign markets. The resources of the Wealth Fund are, among others, the institutions and assets within the scope and program of privatization by the High Board of Privatization, and which are decided to be transferred to the Wealth Fund, and the cash surplus is decided to be transferred from the Privatization Fund to the Turkish Wealth Fund; surplus revenue, resources and assets in possession of state institutions and organizations, which are decided by the Council of Ministers to be transferred to Wealth Fund or to be managed by the Company. Within this scope, with the decision of the Council of Ministers, all or some of the Treasury shares in Türkiye Cumhuriyeti Ziraat Bankası Anonim Şirketi, Türkiye Petrolleri Anonim Ortaklığı (Turkish Petroleum) belonging to the Treasury, Eti Maden İşletmeleri Genel Müdürlüğü (General Directorate of Eti Minerals Management Directorate) and Çay İşletmeleri Genel Müdürlüğü (General Directorate of Tea Enterprises), and various immovables with tourism facilities have been transferred to the Wealth Fund3.

The financing may be realized through security, pledge, surety and mortgage in the portfolio of the Turkish Wealth Fund.

Pursuant to Article 5 of Law No. 6741, assets and rights transferred to the Wealth Fund and all other assets acquired through the operations realized by the Company, which can be subject to registration, shall be registered with the relevant registry, or recorded under the name of "Wealth Fund." The Wealth Fund is vested with legal personality, limited with these registry operations. Accordingly, the legal personality of the Wealth Fund is limited.

Audit of the Wealth Fund

The Company, the other companies to be incorporated by the Company, the Wealth Fund and the sub-funds to be established within the Wealth Fund are subject to independent audit. Additionally, the audited annual financial statements and operations shall be audited by the audit personnel assigned by the Prime Minister, pursuant to independent audit standards. The report to be drafted as a result of the audit shall be presented to the Council of Ministers each year until the end of the month of June.

Financial statements and operations of the prior year of the Company, the other companies to be incorporated by the Company, the Wealth Fund, and the sub-funds to be established within the Wealth Fund shall be audited based on the audit reports drafted by the Planning and Budget Commission of the Grand National Assembly of Turkey in the month of October, each year.

Attachment and Pledge of the Assets of the Wealth Fund

Attachment and pledge of the assets of the Wealth Fund is regulated under Article 7 of Law No. 6741. Accordingly, the assets of the Turkish Wealth fund, and the assets and rights transferred to the Company in order to be managed are separate from the assets of the Company. The assets of the Turkish Wealth Fund, with the exception of the authorized activities and transactions to be conducted by the Turkish Wealth Fund and sub-funds, including obtaining cash and financing from capital markets for the account of Turkish Wealth Fund, may not be provided as collateral, nor be pledged, may not be disposed of for any other means, may not be attached for any reason, including the collection of public receivables, may not be subject to provisional injunction, and may not be included within the bankrupt's assets. The debts and obligations of the Company to third parties, and the receivables of the Turkish Wealth fund from the same third parties may not be set off in exchange for each other.

With these provisions, it is understood that the assets of the Wealth Fund are secured, and that these assets are distinguished from the assets of the Company.

Exemptions and Exceptions concerning the Wealth Fund

Article 8 of Law No. 6741 defines exemptions and exceptions concerning the company and the Wealth Fund, as well as the companies and sub-funds to be incorporated by the Company. As examples, under conditions set forth in the relevant Law, income tax, certain taxes collected pursuant to Municipality Income Law No. 2464, published in the Official Gazette dated May 29, 1981 and numbered 17354, and stamp taxes may be paid in relation to the operations conducted by the Company, including the incorporation and registry operations and registration and publication of its articles of association. Additionally, the Company, the Wealth Fund and the companies and sub-funds to be incorporated by the Company, are not subject to the legislation, practices and restrictions applied to public bodies, institutions and partnerships whose majority shares are held by the state, or established by special legislations, including government business enterprises.


The establishment of the Wealth Fund has the main purpose of bringing the public assets into the economy and providing financing to large-scale investments. Important assets belonging to the Treasury have been recently transferred to the Wealth Fund. The Wealth Fund is vested with legal personality limited by the registration of the assets transferred to the fund. The assets of the Wealth Fund are under protection, based on the fact that they may not be provided as collateral, with the exception of the authorized activities and transactions to be conducted by the fund. Concerning the audit of the Wealth Fund, a special audit system is provided, which is outside of the scope of the Treasury audit.


1 Turkish Official Gazette, 26 August 2016, No. 29813.

2 Turkish Official Gazette, 9 November 2016, No. 29883.

3 Decision of the Council of Ministers dated 24 January 2017 and numbered 2017/9756; Turkish Official Gazette, February 5, 2017, No. 29970 (reiterated).

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.

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