Supporting innovation and entrepreneurship has become essential for both economic growth and global competitiveness in the era of digital transformation. Yet in Türkiye, the startup ecosystem is often forced to evolve within a restrictive regulatory environment.
Startups, by nature, are agile, fast-moving and risk-oriented. However, regulations in Türkiye are largely shaped with traditional businesses in mind. This mismatch subjects startups to outdated rules, significantly hampering their growth.
About 83% of entrepreneurs believe comprehensive regulatory reforms are necessary, while 61% of investors argue that targeted improvements in specific domains would be enough, according to a new report published by the Istanbul Development Agency (ISTKA).
The “Startups and Regulation” report systematically outlines this interaction and offers critical data and recommendations for both entrepreneurs and investors.
Licensing, compliance, uncertainty
The report identifies the three most pressing issues entrepreneurs face regarding the regulations: burdensome licensing and compliance processes; the sluggish adaptation of traditional legal frameworks to new technologies and business models; and widespread legal ambiguity and unpredictability.
The slow pace of legal adaptation is a particular source of frustration.
Growing bureaucratic demands further obstruct the implementation of innovative ideas. Greater regulatory flexibility, especially regarding team structures and hiring practices, would help startups attract the talent they need.
Way for innovation
Tech startups, with their innovative perspectives, help streamline workflows and improve efficiency. Yet obstacles like the lack of digitized business procedures – such as the continued requirement for wet-ink signatures, mandatory notary processes and high startup costs – limit their effectiveness.
The report emphasizes that structural transformation, not just financial support, is essential for developing the entrepreneurship ecosystem.
For entrepreneurs to realize their innovative ideas and for investors to participate sustainably, regulations must be flexible, simple, and predictable. Türkiye’s young population and technological potential offer a major advantage, but unlocking this potential requires regulations that match the pace of innovation.
Remote access
Regulatory delays can accelerate startup failures.
The non-recognition of digital signatures – like those provided by global solutions such as DocuSign – limits remote business capabilities under Turkish law. The absence of legal equivalents for investment models such as Simple Agreement for Future Equity (SAFE) and convertible notes under the Turkish Commercial Code hampers access to financing.
Retroactive taxation, such as capital gains taxes imposed after investment capital has already been spent, creates uncertainty and makes investors hesitant. High bureaucracy in tax, licensing and compliance procedures presents a persistent challenge for startups.
The lack of legal frameworks compatible with freelance, hybrid and remote work models further complicates human resource management in startups, which often rely on flexible staffing to meet urgent talent needs.
Dedicated legal status
Predictability is critical for investment decisions in the startup world.
Regulatory and legal limitations are often decisive factors. Commonly, shareholder agreement clauses cannot be legally embedded into a startup’s founding charter.
Incompatibility with international standards – such as currency transaction restrictions, absence of startup visa schemes and hurdles in hiring foreign talent – create additional obstacles.
The Istanbul Development Agency report outlines five key strategic recommendations, including defining a special legal status and a distinct company type for startups. It says creating testing environments through regulatory sandbox applications makes business operations smoother.
It highlights that tax incentives and legal clarity that facilitate investor entry help resolve many issues from the outset. The report sees regulations as necessary for intellectual property and alternative financing methods. It also suggests that employment and tax policies that align with startup-friendly business models form the core expectations.
AI Factory showcases 7 startups with global ambitions
From driverless vehicles to retail, health care to education, seven ventures embracing various artificial intelligence technologies selected by the AI Startup Factory took the stage this week to present their globally-oriented solutions to a panel of investors.
AI Startup Factory is a corporate venture capital company and acceleration program established by Türkiye’s biggest private lender, Işbank.
Speaking at the opening of the event, Işbank CEO Hakan Aran emphasized that the AI Startup Factory was founded with the vision of creating value for Türkiye.
“My red line is that any institution contributing to Turkey’s startup ecosystem should be part of this platform. We don’t look at whether they’re working with Işbank or not. Our sole goal is to increase the number of globally active tech startups and help them boost the competitiveness of SMEs (small- and medium-sized enterprises) and industrial players in Türkiye,” said Aran.
“We believe there is no alternative in this era where efficiency and competition are more critical than ever. We will take concrete steps to expand the use of AI across all sectors,” he added.
Can Bakır, general manager of the AI Factory, reiterated their commitment to supporting more startups in Turkey on their journey toward global markets.
Targeting global stage
The seven startups – Nomadic ML, My Genome Screen, Capoom, Fedu.ai, Pardon AI, AppNava, and Fal.ai – each presented their AI-powered solutions to a jury composed of academics, experts, and investors.
The ventures span various sectors including health, education, retail, marketing, autonomous vehicles and data-driven transformation. Each company is already operating with a global outlook and continues to invest in human capital and infrastructure.
Some of the featured startups are at the seed stage, while others are further along in their growth journeys, having secured more advanced investment rounds.
Fal.ai takes spotlight
Among the standout participants was Fal.ai, a venture founded in the U.S. in 2021 by Turkish entrepreneurs Burkay Gür and Görkem Yurtseven.
The company presented its high-performance AI platform, designed specifically for generative media applications used by software developers. Fal.ai recently raised $49 million as part of a Series B round, bringing its total funding to $72 million.
The startup’s proprietary inference engine can run diffusion models up to 400% faster than competitors, making it ideal for real-time AI applications. In some use cases, inference times have dropped below 120 milliseconds.
The platform also provides client libraries compatible with popular programming languages such as JavaScript, Python, and Swift, enabling developers to integrate Fal.ai into their applications with ease. Operating on a “pay-as-you-go” model, Fal.ai offers scalable solutions for a wide range of use cases.
Türk Telekom launches 2025 Applications for START internship program
One of Türkiye’s leading telecommunications and technology companies, Türk Telekom has opened applications for the 2025 edition of its START internship program, designed to support university students in making a strong start to their professional careers.
Third-year undergraduate students from across Türkiye are now eligible to apply for the program, which not only provides a valuable internship experience but also offers the potential for full-time employment after graduation.
Committed to empowering young talent and shaping future leaders, Türk Telekom offers early-career opportunities through START under the slogan: “Your First Strong Step to Turning the Future into Success.”
Young participants have the chance to gain hands-on experience across a variety of fields, including information technology, customer experience, human resources, finance, mobile applications and web-based services. Students who successfully complete the internship and meet the criteria may be offered long-term internships, followed by full-time positions upon graduation.
Strong vision
Iskender Bayrak, deputy general manager in charge of human resources at Türk Telekom, says the company believes in being there for young people at the beginning of their career journeys and aims to provide not just a job opportunity, but a “strong and inspiring vision for the future.”
“As one of Türkiye’s largest employers, we support young talent in taking firm steps into the business world and prepare them for a future shaped by digital transformation and innovation,” Bayrak said.
Bayrak highlighted the comprehensive nature of the START program, saying, “With thousands of applications each year, we ensure that participants don’t just receive theoretical knowledge, but also gain practical, real-world experience. Through a four-week learning and development process, we help them discover their true potential.”
“By experiencing Türk Telekom’s innovative culture, young people become equipped not only for today’s challenges but for tomorrow’s opportunities. Through START, our goal is to inspire and train the digital leaders of Türkiye’s future,” he noted.
Open to students nationwide
The START program is open to third-year university students studying in relevant disciplines, who are under the age of 25 and possess strong English language skills.
Internship opportunities are available in departments such as IT, network and access, product and segment management, mobile applications and web services, customer experience, finance, strategy and planning, and human resources.
Applicants will undergo several selection stages, including an online application, English and aptitude tests, group exercises and interviews with HR and department representatives. Selected candidates will participate in a four-week internship from July 21 to Aug. 15.
During the program, students will contribute to Türk Telekom’s innovative projects in technology and communications while developing critical skills.
Interested applicants can access the application form via: https://turktelekomkariyer.com.tr/start
