One alternative for a foreign investor who wants to invest in Turkey is to create a new company in Turkey according to Turkish law. If the investor thinks that re-establishing a company is not advantageous for him/her, he/she may choose to become a partner in the company by purchasing the shares of a Turkish company already established in Turkey. Even in many cases, this is also the option recommended to investors due to the advantages and amenities provided. The first of the requirements that an investor who makes an investment in the form of establishing a company in Turkey or becoming a partner in an established company by purchasing shares is undoubtedly the work permit he/she must obtain for himself/herself and his/her foreign employees.
The work permits to be obtained by a foreigner who establishes a company in Turkey or becomes a partner in a Turkish company, differ from the general regulations regarding work permits in Turkish law. In this bulletin, we will explain the procedure, necessary documents and transactions to be followed by the foreigner in obtaining a work permit for him/herself and the foreign personnel to be employed in the company he/she has newly established or partnered with in Turkey.
Keywords: Work permit, foreign personnel, foreign investment, foreign direct investment, being a worker in Turkey, foreign capital company, working in Turkey, foreign partner, Commercial Law in Turkey, Company Law, employer-employee contract, Employment Contract, Company Law, Aliens Law, Foreign Direct Investment, establishing a company in Turkey, Company Set Up In Turkey, Work Permit In Turkey, buying company shares, buying Turkish company shares.
CRITERIA REQUESTED AT THE WORKPLACE TO GET WORK PERMIT
In Turkish law, work permits look quite comprehensive and complex. According to the type of investment, the region to be invested and the people to be granted a work permit, the conditions and application procedures required for the issuance of a work permit vary. Investments that meet some criteria, or work permits that investors or workers of certain status will receive, were subjected to a different regime, and for some, the requirement to obtain a work permit was removed.
A foreign investor must obtain a work permit to operate in Turkey through a company established in Turkey or a company in which he/she is a partner by taking over shares. The ability to obtain a work permit is also different from the general procedure for obtaining a work permit. First, it should be determined whether the investment made by the foreigner is within the scope of Special Foreign Investment. If there is an investment that can be categorized in this class, it is determined whether the personnel requesting work permit are key personnel. If a work permit is to be obtained for key personnel, this procedure is regulated in the Regulation on Employment of Foreign Personnel in Foreign Direct Investments. For detailed information on this issue, please refer to our bulletin entitled “EMPLOYEE AND EMPLOYER WORK PERMITS IN FOREIGN DIRECT INVESTMENTS”.
In non-specific foreign investments, obtaining work permits of foreign company partners is subject to the provisions of the International Labor Law and the Implementation Regulation of the Law on Work Permits of Foreigners. For this, certain criteria must be met. Explanations on these conditions are given under the headings below.
Condition of Employing 5 Turkish Citizens in the Workplace
5 Turkish citizens must have been employed in the workplace for which the work permit is applied. 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.
In practice, a period of 6 months is given for companies to be established in Turkey to meet the condition of employing 5 Turkish citizens. For this reason, newly established companies can apply for work permits by undertaking and declaring that they cannot meet the required employment condition due to the new opening, but that they will meet this condition over time. However, it should be emphasized that, after 6 months have passed since the establishment of the company, the application for an extension of the work permit is not accepted for the partner of the company who still does not meet the requirement to employ 5 Turkish citizens.
While evaluating the work permit request of the first foreigner, who is key personnel in workplaces with special foreign direct investment conditions, the employment of 5 Turkish citizens is determined by considering the Turkish citizens working in all workplaces of the enterprise in Turkey.
Capital And Gross Sales Amount Requirement
The paid-in capital of the company which will make the work permit application is required to be at least 100,000 TL. Companies with a capital of less than 100,000 TL, must have at least 800,000 TL of gross sales 250,000 TL of exports made in the last year.
But there are some businesses that are excluded from providing the amount of capital and the requirement to employ 5 Turkish citizens. These are:
- In cases where there are provisions in bilateral or multilateral agreements to which Turkey is a party,
- In work permit requests for foreigners to be employed in the procurement of goods and services through contract or tender procedures by public institutions or organizations,
- Work permit requests of foreigners who will work in the education sector and domestic services,
- Evaluation of the work permits of foreigners who will work in the Turkish representations of foreign state airlines,
- Upon the approval to be given by the Authority of the General Directorate of International Workforce, in works requiring advanced technology or in the absence of a Turkish expert with the same qualifications,
In these cases, both the business capital requirement and the employment of 5 Turkish citizens are not required.
Business capital condition is not required for work permits of foreigners who will work in associations and foundations.
In addition, for foreigners to be employed in jobs that require expertise and mastery in the entertainment sector and tourism-animation organization companies, if at least 10 Turkish citizens are employed, the quota for the employment of five Turkish citizens for each foreigner is not applied separately.
Condition Regarding the Share Amount of the Partner of the Company
The share of the company partner who will apply for a work permit must be at least 40,000 TL and the partner must be a shareholder of at least 20% of the company capital. Foreign partners holding less than 20% of the shares cannot obtain a work permit.
Condition of Compliance of the Monthly Wage Amount Declared to be Payable to the Foreigner by the Employer with the Duty and Competence of the Foreigner
One of the conditions to be met by the applicant workplaces and foreigners regarding the work permit requests of foreigners determined in accordance with the article 13 of the Regulation for Implementation of Law on Work Permits of Foreigners is that the amount of monthly wage declared to be paid by the employer to the foreigner must be at a level compatible with the foreigner’s duty and competence. The basis for the said evaluation is calculated by considering the minimum wage in force as of the date of application. Accordingly, the minimum wage to be paid to the foreigner is:
- 6.5 times the minimum wage for top executives and pilots,
- 4 times the minimum wage for unit or branch managers and engineers and architects,
- 3 times the minimum wage for teachers and those who will work in jobs that require expertise and mastery,
- Minimum wage for foreigners to be employed in domestic services, 1.5 times the minimum wage for foreigners to be employed in other professions,
- 2 times the minimum wage for foreigners who will work in tourism-animation organization companies as acrobats and similar titles, and for foreigners who will work in jobs such as masseurs, masseuses and SPA therapists.
FOREIGN PARTNERS OF COMPANIES REQUIRED TO OBTAIN WORK PERMITS
Established according to Turkish law:
- Director of limited liability companies who is a company partner,
- Member of the board of directors who is a company partner of joint stock companies,
- Foreigners, who are the managing partners of the limited partnerships whose capital is divided into shares, are required to obtain a work permit.
PARTNERS WHO DO NOT NEED A WORK PERMIT
Members of the board of directors abroad of joint stock companies established according to Turkish laws and the managing partners of other companies do not need to obtain a work permit. These people benefit from a work permit exemption.
APPLICATION PROCEDURES AND DOCUMENTS REQUIRED FOR A FOREIGN COMPANY PARTNER TO OBTAIN A WORK PERMIT
Foreign company partners can apply for work permits domestically or abroad. For the company partner to apply from Turkey, it is necessary to have a residence permit for at least 6 months. If he/she has such a permit, the foreigner can direct his/her application from Turkey directly to the Ministry. If the foreigner is not in Turkey, they can initiate the application process through the Turkish embassies or consulates in the country where they are legally located. Application procedures are continued through the e-permit system.
Electronic Signature and Registered E-mail address of the applicant are required for work permit applications of foreigners. A foreigner who will receive a work permit must also have a valid Registered E-mail address. Otherwise, the application will not be possible.
In the application, the company partner must submit the following documents:
- Residence permit in Turkey for at least 6 months
- Passport copy,
- Marital status of the foreigner,
- Foreign and domestic residence address of the foreigner,
- One photograph.
A work permit is granted to foreign company partners for a period of one year in the first application. A work permit extension application must be made two months before the expiry of this period.
APPLICATION PROCEDURES FOR WORKERS’ WORK PERMITS
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 should apply for a work visa from the T.R. foreign representative office of the country where he/she resides and inform his/her employer in Turkey of the reference number to be given there. The employer or the authorized user should also use this reference number, upload the necessary documents to the e-permit system, approve them with e-signature, and apply for a work permit to the relevant Ministry through the e-government portal.
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 valid residence permit in Turkey for at least six months.
The documents required in the application are as follows:
For foreign employee:
• Employment contract,
• Biometric passport photo of the foreigner
For the employer:
•Trade Registry Gazette
•Business balance sheet
•Business operating certificate
• (for education or health sectors) Preliminary permit
The employer must apply to the Social Security Center to which the foreigner is affiliated, within 30 days after the work permit of the foreigner is approved and submit a notification of insured employment.
It is possible for foreign investors to establish all types of companies defined in the Turkish Commercial Code in Turkey. There is no obstacle for the investor to become a partner in a company by purchasing shares from a company established in Turkey in order to avoid the troubles and disadvantages of establishing a new company. Moreover, the concept of a company with foreign capital has been established in Turkish law, since with the new regulations, the foreign national is allowed to buy all the shares of a Turkish company.
Whether the investor establishes a new company in Turkey or is a partner in a Turkish company, he/she must obtain a work permit to be able to work in Turkey, unless he/she is one of those exempted from the work permit. In addition to the foreign company partner, foreign personnel to be employed in these companies are also subject to obtaining a work permit to be able to work in Turkey. Illegal work of a foreign national in Turkey without the necessary permits is subject to criminal sanctions.
As Solmaz Law and Consultancy, we continue to provide legal consultancy and application process management services in obtaining employer and worker work permits that our foreign clients need within the scope of their investments in Turkey. We not only follow the processes meticulously to obtain work permits but also to make work permit extension applications on time and to prevent our clients from being victimized. It is sufficient to contact our team to finalize your employee and employer work permit procedures regarding the companies you have established or partnered with in Turkey in a short time.
Solmaz Law and Consultancy Team.
ERKEN, Baki, Türkiye’de Yabancıların Çalışması, Seçkin Yayıncılık, Ankara, 2018, pp.107-125, 127-141.
Regulation for Implementation of Law on Work Permits of Foreigners
International Labour Law
Regulations on the Employment of Personnel of Foreign Nationality in Direct Foreign Investment