Vircon Legal advises investment funds, fund managers, family offices and institutional investors on fund formation, ongoing operations, and the regulatory architecture that supports capital deployment. We work across Turkish GSYF (Girişim Sermayesi Yatırım Fonu: Venture Capital Investment Fund), Cayman exempted limited partnerships, Luxembourg SCSp / SCA SICAV-RAIF structures, and U.S. Delaware LP arrangements: matching the vehicle to each strategy’s investor base, target jurisdictions, and tax position.
Fund Formation
Setting up a fund is a structural commitment that compounds across every subsequent investment and every subsequent investor. We draft and negotiate the Limited Partnership Agreement (LPA), subscription documents, side letters, and the operating agreements that govern the general partner and management company. Where the structure crosses borders — a Cayman GP with a Turkish operating team, or a Luxembourg RAIF with a Turkish portfolio — we coordinate the local counsel chain so the documents align on economics, governance, and tax treatment.
For Turkish GSYF formation, we work through the Capital Markets Board (SPK) authorization track under Communiqué III-52.4 (Yatırım Fonlarına İlişkin Esaslar Tebliği, Girişim Sermayesi Yatırım Fonu provisions) — from incorporation of the founder portfolio management company through SPK licensing, internal control framework, depository selection, and Yatırımcı Bilgi Formu publication. The GSYF rejimine altta yatan tax exemption advantages under Corporate Income Tax Law (KVK) Article 5/1-(ç) are valuable, but only when the fund qualifies and continues to qualify across every measurement period.
Offshore vs. Onshore Structuring
Most funds raising international capital end up either entirely offshore (Cayman or Luxembourg) or in a parallel structure (Turkish onshore for domestic LPs, Cayman feeder for foreign LPs). The choice is shaped by LP composition, target investments, fund timing, and the tax position of both managers and investors. We map the trade-offs with a tax advisor on the call — corporate income tax, withholding, treaty access (especially the Turkey–Netherlands and Turkey–Luxembourg treaties for fund-level distributions), BEPS Pillar 2 minimum tax for larger groups, and U.S. FATCA / OECD CRS reporting cadence.
LPA Negotiation and Side Letters
Once the term sheet is in front of the LPs, the LPA negotiation determines the fund’s economic and governance architecture for its full life. We negotiate management fee structures (committed capital vs. invested capital basis, step-downs), carry waterfalls (American vs. European, with or without GP catch-up), LPAC scope, investor consent thresholds, key person provisions, no-fault divorce mechanics, recycling provisions, and the side letter portfolio — MFN clauses, most-favored-nation negotiation rounds, and excused-investor mechanics for restricted LPs.
Ongoing Operations and Compliance
Funds live or die on operational discipline post-closing. We support GPs and management companies with quarterly reporting templates, capital call mechanics, distribution waterfall calculations, valuation policy alignment with IPEV guidelines, ILPA reporting compliance, and the ongoing SPK reporting cadence for GSYF structures. For U.S.-formation GPs with Turkish operating teams, we coordinate Investment Adviser Act compliance (Form ADV, custody rule), and for European exposure we structure marketing under AIFMD’s national private placement regimes and the reverse-solicitation safe harbor.
How we work
Most fund mandates start with a thirty-minute call to understand the strategy, the LP pipeline, and the timeline. From there we propose a structure memo and a documentation timeline, and we move fast — first closings within 8 to 14 weeks for straightforward Cayman or Luxembourg structures, 4 to 8 months for SPK-authorized GSYF formations. We work with a small set of tax, depositary, and fund administration partners we trust, and we coordinate the full chain so the GP can focus on building portfolio.
Other Practice Areas
Frequently Asked Questions
Who needs a portfolio management licence in Türkiye?
Managing third-party assets on a collective or discretionary basis requires a Capital Markets Board licence through a portfolio management company. Pure investment advisory is a separate licensed activity — the line between sharing research and managing money is where unlicensed managers get into trouble.
Can a foreign fund market to Turkish investors?
Not publicly. Offering foreign fund units in Türkiye requires CMB registration; in practice foreign managers rely on reverse solicitation and dealings with qualified investors, both of which are narrower than managers tend to assume. Marketing trips and Turkish-language materials undermine a reverse-solicitation defence.
Should we structure our fund onshore (GSYF) or offshore?
A Turkish venture capital investment fund (GSYF) offers significant tax advantages for Turkish investors and institutional LPs, while Cayman or Delaware structures suit international LP bases. Many managers end up with parallel structures. The decision is driven by who the investors are and where exits will land.