Is SAFE Now Legal in Türkiye? The New Convertible-Debt Carve-Out for Teknogirişim Startups

The short answer

On 4 June 2026 the Official Gazette (No. 33270) published an omnibus amendment law whose Article 11 quietly changes the rules of the game for early-stage venture financing in Türkiye. It adds a new paragraph to Article 3 of Law No. 5746 (the R&D and Design Activities Support Law): for non-public companies that hold the Teknogirişim Rozeti — the techno-entrepreneurship badge issued by the Ministry of Industry and Technology — conditional capital increases made on the basis of convertible-to-share debt agreements will no longer be subject to the conditional-capital-increase provisions of the Turkish Commercial Code (TCC No. 6102). The detailed procedure will be set by the Ministry of Industry and Technology, with the opinion of the Ministry of Trade.

So is the SAFE now legal in Türkiye? The honest answer: the door has finally been opened for the right companies — but whether you can actually walk through it depends on a secondary regulation that has not yet been written, and on a criminal-law question that still has to be resolved.

Why SAFE never quite worked in Türkiye

A SAFE (Simple Agreement for Future Equity) — and its cousin, the convertible note — lets an investor put money in today and receive shares later, at the next priced round, usually with a valuation cap and/or a discount. It is the default instrument for pre-seed and seed deals in the U.S. The problem in Türkiye was never the contract; it was the conversion.

Turkish corporate law had no clean home for “money now, shares later.” The closest mechanism is the conditional capital increase (şarta bağlı sermaye artırımı, TCC Articles 463–472), designed for a narrow set of cases — convertible bonds and employee stock options — and wrapped in rigid formalities: a qualified general-assembly resolution, a defined class of beneficiaries, a capped conditional-capital ceiling, registration, and shares that come into existence only when the conversion right is exercised in the prescribed way. A SAFE does not fit that mould. It is not a bond, its “trigger” is a future financing at an unknown valuation, and its cap/discount economics sit awkwardly inside a regime built for fixed-term instruments.

The practical result was workarounds: SAFEs signed at a Delaware or other offshore holding level after a flip-up; convertible side letters backed by a promise to issue shares at the next round (with real questions about enforceability and the prohibition on issuing shares below par); or simply doing a priced round earlier than the founders wanted. For years, this mismatch between how the instrument works in practice and what Turkish company law could accommodate was a genuine structural friction point in Turkish venture deals.

“Funds can use convertibles” — but nobody knew how

This is not the first attempt to make convertibles work here. The Capital Markets Board’s communiqué on Venture Capital Investment Funds (Girişim Sermayesi Yatırım Fonları) already allows those funds to finance startups through convertible-to-share debt, and even requires a contract setting out maturity, interest and conversion terms before the money goes in. In other words, at the fund level the instrument was acknowledged. But the company-side question — how the conversion actually issues Turkish shares, through which corporate mechanism, with what formalities — was left undefined. “You may use convertible debt” without “here is how it converts” is permission without a procedure. That is the gap founders and counsel have been living with.

What the new law actually changes

Article 11 does something narrow but structurally important. For a defined population — non-public companies holding the Teknogirişim Rozeti — it switches off the TCC’s conditional-capital-increase regime for convertible-debt conversions and hands the design of a bespoke, presumably lighter-touch procedure to the Ministry of Industry and Technology. The badge itself is not trivial: it is granted to Türkiye-based, independent, SME-status technology companies within fifteen years of incorporation, and is valid for three years. So the carve-out is gated by an eligibility filter, not open to every company.

The intent is clear and welcome: take the TCC straitjacket off the conversion, and let badge-holding startups raise on convertible instruments that can actually convert into Turkish equity — without forcing a flip-up or an early priced round.

A real step forward — but not the finish line

Here is where a careful reading matters. The law is an enabling framework, not a working mechanism — for three reasons.

First, the old rules have been switched off but the new ones have not yet been written. Until the Ministry of Industry and Technology issues the “procedures and principles,” there is a gap: the TCC regime no longer applies, and the bespoke regime does not yet exist. You cannot build a live financing on a procedure that has not been published. The real substance of this reform is in the secondary regulation still to come.

Second, the scope is deliberately narrow. Only Teknogirişim-badge holders benefit. Many early-stage companies do not yet have the badge — which means, as of now, the badge has quietly become a financing asset, not merely a credential.

Third — and this is largely missing from the early commentary — there is a criminal-law dimension the new regime has to clear.

The criminal-law overhang nobody is talking about

A convertible instrument takes money from investors today against shares to be issued later. Done at scale, or without crisp rules, that activity sits uncomfortably close to provisions that carry criminal exposure — on raising funds from investors, on the protection and genuine payment of share capital, and on issuing instruments that look like securities. Turkish law guards the integrity of company capital strictly, and the boundary between a permitted convertible instrument and an unauthorised fundraising or a capital-protection breach is exactly the kind of edge that exposes directors personally. A corporate-law carve-out that removes the TCC formalities does not, by itself, switch off that criminal-law overhang. For this reform to be usable in practice, the secondary regulation has to do more than describe a registration procedure — it has to draw a clear, safe line so that founders and boards using a compliant convertible are not left exposed under criminal provisions. Until that line is drawn, prudent counsel will treat the instrument with care.

The sharpest version of this risk is the prohibition on unlicensed money-lending — tefecilik (Article 241 of the Turkish Penal Code). A convertible instrument is, until it converts, debt: the investor is a creditor, not yet a shareholder. A shareholder advancing funds to its own company stands on different footing — but an outside investor who lends at interest before becoming a shareholder can, in form, look like a party extending interest-bearing loans for gain, which is exactly what the offence of tefecilik targets. Any workable convertible regime for Türkiye has to neutralise this characterisation — whether by anchoring the instrument on the equity track from the outset, by how interest and conversion are framed, or by an express carve-out. It is not a theoretical worry; it is among the first questions a careful Turkish adviser asks.

What founders and investors should do now

• Start from the standard. The U.S. SAFE is the global reference. The official Y Combinator post-money SAFE templates (cap, discount, MFN) and the Pro Rata Side Letter — with our walkthrough — are on our YC SAFE Documents page.
• Get the badge. If there is any chance you will raise on a SAFE or convertible note, the Teknogirişim Rozeti is now a gating asset. Apply early — it takes time, and the carve-out is only for holders.
• Do not rush a Turkish-law SAFE yet. The conversion procedure does not exist until the Ministry publishes it. For deals that cannot wait, structure deliberately — at the fund level under the GSYF framework, via a flip-up where the cap table justifies it, or with a carefully drafted convertible that has a clean conversion-by-capital-increase fallback.
• Read the secondary regulation when it lands. The questions that will decide whether this is genuinely investor-friendly: the conversion mechanics (when shares are issued, at what price), the treatment of valuation caps and discounts, anti-dilution and priority on conversion, the interaction with the GSYF communiqué and tax, and — above all — the criminal-law safe harbour.

The Vircon take

This is the most concrete step Türkiye has taken toward making SAFE and convertible-note mechanics work natively, on a Turkish cap table, rather than offshore. For badge-holding startups it is a genuine structural unlock and a signal that the legislator has heard a complaint the venture community has voiced for years. But “is the SAFE legal now?” is the wrong question. The better question is: can a founder actually close a SAFE round under Turkish law today? — and the answer is not yet, not until the Ministry writes the procedure and clears the criminal-law overhang. We will be tracking the implementing regulation closely and updating clients the moment it lands.

This article is for general information and is not legal advice. For a structure-specific view on raising — or investing — through SAFEs and convertibles in Türkiye, talk to our team.