Employee And Employer Work Permits In Foreign Direct Investments

 

The most basic requirement that foreign companies and individuals who want to invest in Turkey will need is an employee and employer work permit. This permission has been discussed in detail in our legal system, and separate conditions are stipulated for the company and the employees. It would be more accurate to include some explanations so that we can explain the subject in a way that is understandable within the scope of Turkish law.

An investor’s assessment of their investment in a country where they are not citizens for commercial purposes is generally called foreign investment. Foreign direct investments (FDI) have a more technical meaning in Turkish law. Not all foreign investments, but only some of them that meet the requirements of the law, are categorized as foreign direct investments. A different legal regime has been preferred for foreign direct investments in Turkey. This situation aims to facilitate the business of foreign investors in Turkey, thereby encouraging foreign investment. It is more practical for the foreign direct investor to benefit from some rights and obtain some permits in Turkey.

In this bulletin, we share with you the conditions and procedures required for obtaining a work permit for foreign personnel to be employed in the business to be established or activities to be carried out in Turkey and the employer itself within the scope of investments in the foreign direct investment class.

1-) What Investments Are In The Class Of Foreign Direct Investment?

By foreign investor,

Brought from abroad:

  • Cash capital in the form of convertible currency traded by the Central Bank of the Republic of Turkey,
  • Corporate securities (excluding government bonds),
  • Machinery and equipment,
  • Trademark, patent etc. through intellectual property rights; or

Domestically provided:

  • Profit, revenue, money receivables or other rights related to investments of financial value used in reinvestment,
  • Through economic values, such as rights to the exploration and extraction of Natural Resources,
  • Creating a new company, buying a company, or opening a branch, 
  • Investments in the form of becoming a shareholder in an existing company through acquisitions other than stock exchanges or acquisitions that provide at least 10% of shares in stock exchanges or the same percentage of voting rights are classified as foreign direct investment.

As can be seen, only capital investment, for example, buying real estate in Turkey, is not legally foreign direct investment. For an investment to be considered a foreign direct investment, it is necessary to establish a company, buy a company, open a branch, or become a partner in an existing company by acquiring shares or voting rights at a certain rate.

2-)Work Permits In Foreign Direct Investments

Obtaining work permits in foreign direct investments varies according to the nature of the investment and whether the person who will receive the work permit is the worker/employer. The necessary conditions and the authorities to which the applications will be directed will also vary depending on whether the investment is of a special type of investment. Therefore, in order to obtain a work permit, the steps below must be followed in order.

  • In the first step, the legal category of the investment should be determined. The work permits of foreigners who will work in Special Foreign Direct Investments and Free Zone Investments are regulated in separate regulations.
  • If Special Foreign Direct Investment is in question, it should be determined whether the personnel to be employed are key personnel.
  • Finally, attention should be paid to whether the foreigner is a foreigner who has been granted temporary protection. Because the work permit of foreigners provided with temporary protection is covered by a separate regulation.

Another issue that needs to be placed particular focus on is whether the foreigner has a turquoise card. Turquoise card holders can benefit from the rights granted by an indefinite work permit in Turkey.

3-) Special Direct Foreign Investments

As of 2021, companies or branches that meet at least one of the following conditions are within the scope of Special Foreign Direct Investment:

  • Provided that the total capital share of the foreign partners is at least 525,398 Turkish Liras, the last year’s turnover of the company or branch is at least 189.7 million Turkish Liras,
  • Provided that the total capital share of foreign partners is at least 525,398 Turkish Liras, the last year’s exports of the company or branch should be at least 1 million USD,
  • Employment of at least 250 personnel registered with the Social Security Institution in the company or branch in the last year, provided that the total capital share of the foreign partners is at least 525,398 Turkish Liras,
  • Provided that the minimum fixed investment amount foreseen is at least 63.0 million Turkish Liras, if the company or branch will make an investment,
  • Having foreign direct investment in at least one country other than the country where the parent company is headquartered.

At the liaison offices, a work permit is granted by the Ministry of Family, Labor and Social Services to at most one foreigner with a certificate of authorization, limited to the duration of the activity, provided that the activity permit has been obtained from the Incentive Implementation and Foreign Capital General Directorate of the Ministry of Industry and Technology.

4-) Key Personnel Concept

The methods and rules for obtaining work permits for key personnel who will work in special foreign direct investments are regulated in the Regulation on Employment of Foreign National Personnel in Foreign Direct Investments.

The work permit of the personnel other than the key personnel who will work in special foreign direct investments is obtained in accordance with the provisions of the International Labor Law and the Implementation Regulation of the Law on Work Permit of Foreigners.

The personnel in the following positions in a company established in Turkey and fulfilling at least one of the conditions of being a foreign direct investment stated in the previous title are called key personnel:

  • Employees in the company’s top management or executive position,
  • Managing all or part of the company,
  • Supervising or controlling the work of the company’s auditors, administrative or technical personnel,
  • Hiring new staff to the company or dismissing existing staff or making offers on these issues,

Company partner, chairman of the board of directors, member of the board of directors, general manager, assistant general manager, company manager, company assistant manager and any person who works in similar positions, in charge of or authorized in at least one of their fields,

  • A person with knowledge that is considered fundamental to the company’s services, research devices, techniques, or management,

In the liaison offices, at most one person for whom a certificate of authorization is issued by the parent company abroad.

5-) Where To Apply For A Key Personnel Work Permit?

Key personnel work permit applications can be made from Turkey or abroad. A foreigner can apply for a work permit from Turkish foreign representative offices (embassies and consulates) in the country in which he/she is located, without coming to Turkey.

The foreigner who is legally in Turkey (for example, foreigner with a short-term residence permit) or the person who is the employer of the foreigner or his/her legal representative can apply by submitting the necessary documents to the Ministry of Family, Labor and Social Services after the electronic application is made on his7her behalf. You can contact Solmaz Law and Consultancy team regarding the legal consultancy and transactions you will need in the legal procedures for obtaining foreign work permits.

6-) What Are The Required Documents In The Key Personnel Application?

For Company Partner, Chairman of the Board, Member of the Board of Directors, General Manager, Assistant General Manager, Company Manager, Assistant Company Manager, and similar positions;

  • Signature Circular,
  • Copy of the decision of the board of Directors or the Board of Members

For experts with knowledge deemed essential to the organization’s services, research instruments, techniques, or management;

  • testimonials, diploma copies and translations,
  • value documents and information for the area where the personnel in this scope will be employed and their translation,

Assignment letter stating that the key personnel to be employed are assigned by the parent company abroad,

An operating permit obtained from the Ministry of Commerce for foreigners to be employed in liaison offices,

Documents indicating that at least 200 thousand USD or equivalent foreign currency has been brought from abroad for the liaison offices in the last year (authorization certificate for the bureau officer and documents such as bank receipt, bank letter, copy of foreign currency purchase document related to foreign currency transfer).

7-) Work Permit Of Foreigners In Investments That Are Not In The Scope Of Foreign Investments

The procedure for obtaining work permits for the personnel who will work in investments that are not in the category of foreign direct investments are carried out within the scope of the International Labor Force Law and the Implementation Regulation of the Law on Work Permits of Foreigners. The required conditions also vary depending on the type of work permit to be obtained. For detailed information on the procedures and documents required for obtaining a temporary work permit, an indefinite work permit, an independent work permit, an exceptional work permit or a work permit exemption, you can look at our bulletin titled “GENERAL CONDITIONS FOR FOREIGNERS TO WORK IN TURKEY AND OBTAINING WORK PERMIT“.

8 -) What Are The Information And Documents Requested In The Work Permit Application?

a-What are the information and documents requested from the foreign worker?

  • Passport copy: in cases where the passport is not written in Latin letters, the official translation must be added to the application.
  • Diploma or Temporary Graduation Equivalency Certificate of the foreigner who requests a work permit within the scope of professional services: In addition to the above documents, if the applicant has higher education abroad, he/she must also send the equivalence certificate to be obtained in accordance with the “Overseas Higher Education Diploma Equivalency Regulation”.
  • For domestic applications, a copy of a residence permit valid for at least six months at the date of application.
  • Copy of diploma or temporary graduation certificate: It must be officially translated into Turkish and approved by the competent authorities.  ATTENTION: this document must be submitted both electronically and on paper.
  • If the foreigner requesting a work permit does not have a valid residence permit, it is obligatory to apply for a work permit to the Republic of Turkey representations in the country where the foreigner is a citizen or permanently residing abroad, by submitting a document showing the employment contract or company partnership.

b-What are the information and documents requested from the foreign employer?

The following documents requested from the foreign employer institution are only scanned during the electronic application and submitted online.

  • Turkish Trade Registry Gazette showing the latest capital and partnership structure of the organization
  • Balance sheet and profit/loss statement for the last year approved by the tax office or certified public accountant
  • Document proving that organizations (including consortia) that have the right to carry out projects for which international tenders have been opened by public institutions and organizations have undertaken the work to be received from the relevant institution and organization.
  • Payroll to prove that Turkish engineers/architects/urban planners are employed in the same profession in legal entities that will employ foreign experts within the scope of engineering, architecture, contracting and consultancy services.
  • Notarized power of attorney of the person authorized to make the electronic application as a user on behalf of the institution and organization that will employ foreign personnel, or a document showing that the person in the capacity of user works in the institution or organization making the application.
  • It is not enough to send the following documents electronically; must be physically submitted to the Ministry.  
  • Application Petition: The petition containing the work permit request must be scanned and forwarded during the electronic application and handed over to the relevant authority by the employer with an original signature.
  • Foreign personnel application form: The form to be filled in electronically is sent to the Ministry as a paper copy after it is printed and signed by the employer and the foreigner. In the absence of a signed form, an employment contract between the parties is sent. If the form is unsigned and there is no employment contract, the application will not be processed.

In addition to all these documents, there are also some documents requested by sectors. Some of them are listed below:

Tourism Sector:

For foreigners who will work in establishments with a tourism business certificate, a business and investment certificate obtained from the Ministry of Culture and Tourism, and an activity certificate obtained from the Chamber of Commerce, if not a certified business.

Entertainment Industry:

Testimonial that has been officially translated into Turkish or approved (According to the 1961 Hague Convention, there will be an apostille annotation or a Foreign Representative’s acknowledgment on the testimonial of the foreigner whose work permit is requested, showing that he/she has worked as an internationally renowned artist or has worked in foreign companies at the same level.)

Business Certificate from the Ministry of Culture and Tourism.

Mandatory Considerations in The Employment Contract with Foreign Artists:

  1. A record that the foreign artists will undertake that the return tickets and travel expenses will be covered by the employer when they return to their countries at the end of their working period,
  2. Commitment that wages cannot be lower than three times the minimum wage, which changes every six months,
  3. Workplace Tax Number,
  4. Employee rights
  5. For consultation when necessary, there will be 155 Police Helpline and 157 Helpline for Victims of Human Trafficking, 170 Helpline numbers and contact phones of Provincial Directorates of Labor and Employment Agency.

Aviation Industry:

A pilot’s license approved by a sworn translator or official authorities in Turkish for foreign pilots who will be employed in establishments operating in the aviation sector.

The work permit to be issued by the Ministry of Family, Labor and Social Services becomes valid together with the Validation Certificate to be obtained from the General Directorate of Civil Aviation of the Ministry of Transport, which validates the licenses of foreign pilots in Turkey.

Engineers and architects:

The “Diploma or Temporary Graduation Equivalency Certificate” to be obtained by the foreigner, for whom a work permit as an engineer or architect is requested within the scope of Professional Services, in accordance with the Equivalency Regulation for Foreign Higher Education Diplomas, pursuant to Articles 3 and 7/p of the Law No. 2547, in case of higher education abroad.

For legal entities that will employ a foreign expert as an engineer/architect/urban planner, payroll proving that a Turkish person is employed in the same profession.

ATTENTION: The majority of these documents can be scanned during the application and sent online.

9-) Obtaining Work Permit By Founding A Company In Turkey Or Purchasing Turkish Company Shares (As A Partner)

This issue differs from a foreign company and its foreign partner obtaining a work permit in Turkey. Because here, according to Turkish laws, it is possible to establish a new company or to become a partner in the company by purchasing the shares of a Turkish company already established in Turkey by a foreign investor. For a foreign investor to obtain a work permit through the company she established in Turkey or the company he/she has become a partner with by acquiring shares, he/she must fulfill certain conditions:

  • Turkish employment requirement at the workplace: 5 Turkish citizens must have been employed at the workplace for which the work permit application is made. If a work permit application is to be made for more than one foreigner at the workplace, 5 Turkish citizens must be employed for every 1 foreign employee after the first foreigner who has a work permit. While evaluating the work permit request of the first foreigner, who is key personnel in workplaces that have special foreign direct investment conditions, the number of citizens working in all workplaces in Turkey is taken into account in the evaluation of the employment condition of 5 Turkish citizens.
  • Capital and gross sales amount requirement: The paid-in capital of the company for which a work permit application will be made is required to be at least TL 100,000. The gross sales of companies with a capital of less than 100,000 TL must be at least 800,000 TL or the amount of exports made in the last year should be 250,000 USD.
  • Condition regarding the share amount of the company partner: The share of the company partner who will apply for a work permit must be at least 40.000 TL and must be a shareholder of at least 20% of the company’s capital.  In addition, the partner applying for a work permit is required for the last 6 months of the 1-year work permit to meet the 5 Turkish employment conditions.

It should be noted that the members of the board of directors abroad and the managing partners of other companies of joint stock companies established according to Turkish laws do not need to obtain a work permit. However, it was established according to Turkish laws; Foreigners who are the directors of the limited companies, the members of the board of directors who are the partners of the joint stock companies, and the commandite partners of the limited companies whose capital is divided into shares are required to obtain a work permit.

Application procedures start online via the e-permit system prepared by the Ministry of Family, Labor and Social Services. For this, if the foreigner is abroad, he/she must apply for a work visa from the foreign representative office of the Republic of Turkey in the country where he/she resides and inform his/her employer in Turkey of the 16-digit reference number to be given there. The employer must also apply for a work permit to the relevant Ministry through the e-government portal using this reference number.

To be able to apply for a work permit from within the country through the e-permit system, the foreigner for whom the permit application will be made must have a residence permit valid for at least six months in Turkey.

For detailed information on this subject, we recommend that you look at our bulletin titled “OBTAINING WORK PERMIT FOR FOREIGNERS BY FOUNDING A COMPANY IN TURKEY OR BEING A PARTNER OF A TURKISH COMPANY”   on this link https://www.solmazlaw.com/en/obtaining-work-permit-for-foreigners-by-founding-a-company-in-turkey-or-being-a-partner-in-a-turkish-company/

Conclusion

The legislation to be implemented on obtaining work permits within the scope of foreign direct investments is quite dispersed. In Turkish law, many different regulations are in force at the same time, together with the International Labor Law, regarding the work permit of foreigners. It is important to correctly determine and implement the procedure to be followed according to the investment type and the title of the applicant, as each of them requires the fulfillment of separate criteria and the completion of legal procedures. Otherwise, the process of obtaining a work permit will be prolonged or result in an adverse outcome due to reasons such as not fulfilling the conditions and lack of documents.

As Solmaz Law and Consultancy, we guide you in the most accurate way by making the necessary evaluation for obtaining a work permit in Turkey, with our staff of lawyers who are experts in Foreigners Law, and we offer legal support services for the execution of these transactions on your behalf, upon your request. We respectfully remind you that you can contact our team to complete your transactions as soon as possible and without any problems, to follow up your application processes and to provide you with the necessary information regularly.

References

Early, Baki, 2018, Türkiye’de Yabancıların Çalışması, Seçkin Yayıncılık, Ankara, p.107-125.

ERGIN, gift, 2017, Türk Hukukunda Yabancıların Çalışma İzinleri, Beta publishing, Istanbul, p.100-104.

ÇİÇEKLİ, Bülent, 2014, Yabancılar ve Mülteci Hukuku, Seçkin Yayıncılık, Ankara, p.113, 118-122.

<https://www.ailevecalisma.gov.tr/uigm/calisma-izni/izin-turleri/>

<https://www.ailevecalisma.gov.tr/uigm/genel-bilgiler/dogrudan-yabanci-yatirimlar/>

Turquoise Card Regulation, Article 19.

Regulation for Implementation of Law on Work Permits of Foreigners.

Foreign Direct Investment Law.

International Labour Law.

Regulations on the Employment of Personnel of Foreign Nationality in Direct Foreign Investment.

 

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