Turkey is a place where the sun smiles differently in each geography as well as it’s found at the intersection of three major cultures surrounded by Europe, Asia and the Middle East so that its population belongs to the combined culture and, as a result of this blended structure, Turkey is an open-minded country no matter what is your nationality, race, religion, language, appearance and so on. Therefore, you can easily find a suitable place related to your ideal living style, climate, nature, common personality type, and more. In parallel with it, plenty of people have begun living in the country that consists of approximately 1.000.000 foreign nationals according to the official record of the Turkish Statistical Institute (TUIK) and this number keeps increasing day by day. Referring to the official statistics, the most developed cities such as Istanbul, Ankara, Izmir, Antalya and Bursa are featured thanks to their industrial, touristic, political, strategic and various business advantages.
Istanbul – 327.871
Ankara – 84.472
Antalya – 57.423
Bursa – 26.198
Izmir – 26.075
Istanbul outscores the rest of the cities with its crowded population reaching up to nearly 20 million people and internationally important statues including historical, economical, strategical, and touristic values. From this point of view, Istanbul is 8th the most visited city worldwide in addition to the 10th of Antalya.
How Can I Get Turkish Work Permit?
Applying for a work permit is divided into two types depending on where you reside during the application phase. There is one certain rule that foreigners can not get a work permit on behalf of their names. If a foreign national is willing to work in Turkey, either a local company or a consultancy firm authorized by the related company from Turkey must be a sponsor and handle paperwork a lot to assure your arrival. Before the applications of both sides, these should not be ignored that;
- To obtain a work permit, you need to get a residency permit at first
- The duration of your residency permit is considerably important. The Turkish Republic doesn’t allow foreign nationals who have less than a 6-month residency permit to apply for a work permit program.
- Applications can be rejected due to any subjective reasons
When you achieve all these steps, the easiest stage including only paperwork and applying workload begins. According to where you are located, application types are split up into two categories named as ‘’Domestic Applications’’ and ‘’Overseas Applications’’.
Domestic Applications (Also Employer Guide)
This applying type consists of interior applications of Turkey. If you apply for a work permit from Turkey, you fall into this category. Step by step;
- Both employer and foreign employee candidates apply to the Ministry of Labour and Social Security website as online. However, the required documents are totally different for both sides in the online applying phase.
- Employer signs up a username and inputs all information about the employee from ‘’www.turkey.gov.tr’’.
Warning: Employees should verify all this info. Wrong and missing info undermines the process and extends the duration.
- The documents printed out after the online application are signed up by both sides
- All documents and necessity papers need to be transmitted to the Ministry of Labour and Social Security in 6 days after the online applications.
- If not delivered on time, the whole process is obliged to start from the beginning
- The ministry investigates the application and notifies the result by e-mail and written way.
- When approved of a work permit by the Ministry of Labour and Social Security, residency and work permit fees are requested from the employer. The employee can begin his/her business life in Turkey after the payment to related bank accounts.
- Employer reports the insurance input to the Social Security Institution (SGK). Insurance payments are determined according to the fee declared to the Ministry of Labour and Social Security.
è Salary of foreign nationals can not be lower than minimum wage (2324 TRY) in Turkey.
Necessary Documents for the Employee
- Four passport-sized photos
- Photocopies of the pages in your passport including the photo
- Photocopies of the passport expiration date
- Photocopies of the last stamped entry on the passport
Overseas Applications (Also Employer Guide)
Unlike domestic applications, a different procedure is implemented for both sides such as;
- People who don’t have a residency permit yet can apply from either their hometown or hosted country they live in.
- Application is acquired from the closest Turkish Consulate/ Turkish Embassy
- The following step is to get an application reference number (consisting of 10 numbers) and conduct it to the employer.
- Employers should apply to the Ministry of Labour and Social Security website as online with this reference number in 6 days after the application of the employee.
- Gathered documents need to be delivered within 10 days. Otherwise previous steps are ignored and restart from the beginning
- Feedback duration by the ministry takes 30 days if the whole information sets up accurately.
- The result is notified by call or email after the application is approved of
- When work permit and visa are confirmed by the Ministry of Labour and Social Security, residency & work permits and consular visa fees are paid to the Turkish Consulate. The number of fees shows variances from country to country.
- The input of the Social Security Institution needs to be handled within 30 days starting with your entry to Turkey. Insurance payments are determined according to the fee declared to the Ministry of Labour and Social Security.
Necessary Documents for the Employee
- Photocopy of the work permit application
- A copy of work agreement
- One passport-size photo
Wages for Foreign Nationals?
Wage declared by the employer must be suitable for the statue and upkeep of the foreigner. By concerning the currency and sufficiency of payments, the amounts written below are seen comfortably fit for a foreigner sustaining its presence in Turkey.
- 5 times more salary than minimum wage (2324 TRY) for high-end managers, pilots, prior-authorization architects and engineers, etc.
- 4 times more salary than minimum wage (2324 TRY) for unit and branch managers, engineers and architects, etc.
- 3 times more salary than minimum wage (2324 TRY) for professions requiring expertness, teachers, and so on.
- 5 times more salary than minimum wage (2324 TRY) for the other jobs
- The same amount of salary with the minimum wage for a household employee
è Average duration of the work permit changes between 6 months and a year related to the profession.
It depends on the duration of your residency permit and what profession you’re participating in.
What About Property Owners?
Even though the government made an announcement about the regulation leading up to work permits for foreign property holders in May 2016, any certain path hasn’t been drawn yet. Any further development of the subject is going to be shared with you.
Work Permit as an Employer
The reason why we define each step of getting a work permit for an employee and employer together is because you are independently free to set up your own company in every sense. As in many aspects, Turkey embraces investors from all over the world with supportive opportunities. Besides great loans are provided by a lot of Turkish banks, many business grants are reserved for foreign investors, who wish for setting up their companies in Turkey, at will. To benefit from economic amenities offered by the Turkish Government, some forms are liable to be prepared and get contact with related departments in Turkey. In short, If you are interested in setting up your own business in Turkey, the following titles make it simple for you at all. If you prefer virtual information more than paragraphs, you can visit SeriftheBroker YouTube Channel and titled down as ‘’How to Set up a Company in Turkey’’
How to Set up a Company in Turkey?
Despite being numerous company types, the most preferred company systems are featured as an individual company, limited company, and joint-stock company structures.
I – Individual Company
Individual companies are the types of companies in which the partners are %100 responsible for their personal assets and liabilities.
- When considered the loss of everything in terms of running into bankruptcy, it may cause devastating consequences.
- The advantage of this company type is that they are highly easy to set up and costs lower than the others.
- It’s not able to meet the long-term needs of most entrepreneurs due to being opposite to partnership structure
- Under all these circumstances, this company type is going to be an ideal one if your investment model is shaped within the framework of small businesses such as grocery, carpenter, tailor which are lined on a low scale.
II – Limited Company
The most sought after company type can either be set up alone as well as it can be the compound of many shareholders depending on your will.
- The required amount of money can be fulfilled with at least 10.000 Turkish Lira.
- Capital for %100 shares and your capital should be deposited in the company bank account as your capital commitment within 2-year time.
- The liability of shareholders is limited to the amount of shared capital that is invested in advance.
- Company’s main agreement defines the rules of the company and can turn out different forms by the majority of shareholders in time.
III – Joint-stock Company
Although it shows similarity with the limited company a little bit, it includes many other rules as well.
- The lowest amount for this type is at least 50.000 capital commitment
- A board of directors is needed
- As a shareholder, you can become a board chairman as well as you can assign a Turkish manager from outside who is unnamed on shareholders’ list.
- If your capital passes over 250.000 Turkish Lira, the employment of a company lawyer is a must.
- The choice of the joint-stock company seems better for companies that require easier management with many shareholders such as stock market business, the larger business structure so that the company can run out remotely with ease.
Setting up a Company (Step by Step)
- You should reach an agreement with a freelance accountant from Turkey to deal with your company books.
- With the accountant’s contributions, you need to determine the name and rules of the company. (such as type of business you attempt to do and other issues)
- Receive a personal tax number from any tax office.
- Translation of your passport into Turkish from the notary.
- To run your business in Turkey, you need to have at least a 6-month residency permit.
- The physical address for your company is a must. (It can be either rental office, virtual, common offices, or a part of your house designed as an office in Turkey. Tax officer visits you at your address and these visits are performed periodically)
- You first sign the documents of your company launch at the trade office.
- If you decide to join a joint-stock company, %25 of capital commitment should be paid into the company bank account by each shareholder dating from day 1. (for the rest amount or limited company shareholders, the 2-year legal duration is valid for this capital commitment promise)
- Acquired approval from tax & trade offices by your accountant that provides to make last signatures at the trade office in the next step so that you can get Power of Signature from notary to represent your company as a general manager or manager director afterward.
- Depending on how many employees you are working with, location and your company structure, it costs $1,000 for setting up besides approximately $1000 additional running expense for each year.
Significance of a Company for Real Estate
On commercial issues, a company should be founded to get revenue from short-term leasings legally. Unlike long-term contracts such as annual rental assignments requiring just a yearly declaration to the tax office on paper, you should invoice separately for each customer who rents your apartment or villa for sale in Istanbul daily. To invoice your guests, you need to have a company for constant usage of daily purposes. On the other hand, another necessity of the company comes out to buy farmland. It is because foreign nationals don’t have the right to register farmland directly on their name. That’s why setting up a company in Turkey makes the process valid due to including Turkish identity so that you can have farmland on your company name. In addition to trade flow, foreigners are limited to buy and sell a certain amount of cars and real estate Istanbul for sale in a year. However, you can easily overcome that issue if you plan to operate a multi-sale business on Istanbul property for sale and vehicle.
What are the Tax Regulations?
As a foreigner, it is going to be a manageable issue to comprehend legal procedures and steps before leading up to your company in Turkey. Thus, tax regulations, consisting of a huge part of your company workload, should be excessively swallowed in a detailed way.
Value-Added Taxes (V.A.T.)
There are several VAT percentages in Turkey scaling as %18 for services, %8 for restaurants and accommodations as well as it’s seen some VAT exemptions on products that are exported abroad. In parallel with it, you either pay VAT or collect VAT each month to make a deduction from the next month.
Withholding Tax (Stoppage Tax)
It is a type of tax you pay additional situations without invoicing in addition to your expenses such as renting an office from a person who is not able to invoice you which is the percentage of withholding tax that is always stabilized %20 for it. What’s more, the percentage changes as %10 if you buy a service from an individual according to his/her profession.
Income Tax (Profit Tax)
Income tax is the other subcategory of tax that is deducted from your company when you hopefully make a profit. Together with changing related to your company type;
- Between %15 – %35 for individual companies
- %20 for limited and joint-stock companies (%15 withholding tax is deducted from each profit of shareholder if the company decides to distribute the profit among shareholders)
Turkey is a homeland of numerous world brand headquarters due to providing to the Balkans, the Middle East and Asia in a place and the value of Istanbul has increased globally day by day thanks to its perfect location for business amenities. If you are interested in setting up a company in Turkey and eager to have your own office at the heart of Istanbul, don’t hesitate to contact us for further information and check the offices on the website.