Angel Investment Capital System

Atty. Ecem Akyıldız


Legal arrangement in Turkey regarding the persons named as ‘Angel Investors’ was made through the ‘Regulation on Business Angels” (Regulation) published in the 15 February 2013 dated Official Gazette. Angel Investors are denominated in the Regulation as ‘Business Angels’ (BA) and defined as “Real persons who transfer their private property and/or experience and background to start up and early stage enterprises”.

The purpose of the Regulation is to provide a financial instrument for start-ups and early stage enterprises experiencing difficulties in access to finance, make a particular behavioural culture and codes of conduct dominant and increase the professionalism in the market, to institutionalize the Business Angel Capital (BAC) and grow it into a trustworthy finance market for entrepreneurs, and to make the BAC investments attractive through state aids. 



Only licensed BAs can benefit from the state aids.  Investors with high income or wealth or experienced investors, who satisfy one of the requirements stipulated in Article 5 of the Regulation, may obtain the BA license with validity of 5 years from the Undersecretariat of Treasury by submitting the information and documents prescribed in the Regulation to Undersecretariat through BA Networks. At the end of the validity period, BAs may apply for the renewal of the License to the Undersecretariat through accredited BA Networks. Following the assessment of Undersecretariat, the BA license period can be extended for a periods of five years. BAs shall not transfer the licenses granted by the Undersecretariat to any other person.

Business Angel Networks, through which BA Licenses are obtained, are legal entities that bring the entrepreneurs and BAs together as an intermediary and are established as per the provisions of Turkish Civil Code, Turkish Code of Obligations or Turkish Commercial Code.  Since BA Networks act in the capacity of an intermediary for both license application and for bringing the entrepreneurs and BAs together, each BA should be a member of at least one BA Network accredited by the Undersecretariat.


1. Terms and Conditions

BAs may receive state aid for their investments up to twenty different joint stock companies during five-year validity period of their license. 

In case of being investing in a venture company by at least two licensed BAs; BAs may receive state aids for co-investments made in up to twenty different joint stock companies during five-year validity period of their licenses, excluding their individual angel investments.   

In both cases, the investments exceeding the specified limits and those made in venture companies which operate outside the listed sectors in the appendix to the Regulation shall not be entitled to receive state aid.

In addition to these general terms and conditions, a number of specific criteria have to be met in order to receive state aid. These are;

a) Investment Amount

Price of each acquired venture company shares by BA shall not be below TRY 20,000 or above TRY 1,000,000 on the annual basis.

For the co-investments made by BAs, investment amount to be made in each venture company shall not be below TRY 20,000 or above TRY 2,000,000 on the annual basis.

b) Minimum and Maximum Partnership Interest

BAs and BA Partnerships shall not be entitled to; be the controlling shareholder of the venture company, and control it directly or indirectly, individually or jointly; hold more than 50% of the corporate shares and voting rights represented by these shares; assign more than 50% of the board members.  However, BAs are entitled to hold the privileged shares granting the right of representation in the board of directors, of the venture company. 

c) Qualifications of the Invested Company

- Companies in which capital is invested must be a joint stock company subject to the Turkish Commercial Code in order for the BAs to benefit from state aid.  Other than being a joint stock company;

- The net annual sale of the venture company shall not be more than TRY 5,000,000 for the last two fiscal years before BA’s participation,

- It must have fifty employees at most,

- It must not be depended to or not be under the sway of BA, his/her wife, or his/her wife’s/husbands descendants and ancestors with third degree relatives and their kinship directly or indirectly in terms of capital, administration or supervision,

- It must not be under the control of another company,

- It should be operating in sectors or activities determined by the Undersecretariat and specified in Appendix 4 regarding the list of sectors to be state-subsidized,

- Its shares shall not be offered to the public.

2. Provided aid

Licence holder BAs who hold the participation shares of invested venture companies for minimum 2 full years are entitled to benefit from state aid - from the tax support within the scope of the Provisional Article 82 of the Income Tax Act.  BAs satisfying these requirements may deduct 75% of the amount of shares from their income and earnings stated in annual tax statement in the period they acquired the shares. This rate shall be applied as 100% for the BAs investing in companies whose projects are supported under the scope of research, development and innovation programs by the Ministry of Science, Industry and Technology, the Scientific and Technological Research Council of Turkey (TUBITAK), Small and Medium Enterprises Development Organization (KOSGEB) in the last 5 years before the date of application. In both cases, the amount of deduction cannot exceed TRY 1,000,000 annually.


“Angel Investors” who invest in start-up or early-stage enterprises experiencing difficulties in access to finance, are entitled to benefit from state aids, provided that they meet the criteria stipulated by Regulation and maintain these criteria for a given period. It is of significant importance that the invested shares of BA that are subsidized are held for 2 full years and the BA is a license holder.