Investment funds are generally assets that are subject to capital market legislation and do not have a legal entity. Venture capital investment funds (VCIFs) are funds that invest in companies that are not publicly traded and are not traded on any stock exchange.

VCIFs bring together small and medium-sized businesses with high growth potential with investors using an investment fund structure and enables these businesses to receive long-term investments from investors for their establishment and operation. Investors who adopt the venture capital investment fund model target “start-up” companies that offer innovative approaches. In short, venture capital investment funds are the focus of those who want to seize the opportunity to invest in the ventures of the future at an early stage.

 

VCIFs can also invest in companies operating in more traditional industries, with an established business model and greater growth potential, but with lower profitability for various reasons. With this method, VCIFs aim to increase their profitability and growth by becoming capitalists to the extent that they can obtain management and control of private equity firms. In this model, the main goal of investors is not to make a profit that will multiply their investments, but to bring an established business back to a position where it can make a profit and then exit.

​

VCIFs offer various tax advantages to individual investors:

• If investors sell their VCIF shares after 2 years, income tax withholding is zero.

• Investors are not required to include income from these funds in their annual returns.