Work Permit

Work Permits of Foreign Shareholders & Key Personnel

The rules and principles stipulated in the Law on Work Permits of Foreigners (Law no:4817) are applicable to the foreigners working dependently or independently in Turkey.  The notion of ‘Dependent Worker’ is defined, under article 3 of the Law no: 4817, as the ‘foreigner who works against wage, salary, commission, etc. at the disposal of one or more employer that has a real or judicial identity’. On the other hand, by the virtue of the same article, a ‘foreigner works for and on the account of himself/herself, whether he/she employs other persons or not’ is considered as working independently.

In accordance with this legal base, a foreigner shareholder of a private company established in Turkey might be required to obtain work permit. Being solely a shareholder or a board member does not grant a working permission in Turkey. Work permit requirement of the foreigner shareholder is not dependent on the business structure. Whether it is a joint stock company (A.Ş.) or a limited liability company (Ltd. Şti.) or other types of businesses described under relevant Turkish legislation, in order to take active part in the operation of company, foreigner shareholders might be required to obtain work permit. However, work permit application procedure is slightly different between those companies with foreign capital and the companies classified as foreign direct investment.

WORK PERMITS UNDER THE SCOPE OF FOREIGN DIRECT INVESTMENT LAW

Principles concerning Foreign Direct Investment are specifically regulated by Law no: 4875 on Foreign Direct Investment[1] and Regulation on the implementation of Foreign Direct Investment Law[2]. Article 1 of the Law no 4875 defines the aim of the Foreign Direct Investment Law as;

“The objective of this Law is to regulate the principles to encourage foreign direct investments; to protect the rights of foreign investors; to define investment and investor in line with international standards; to establish a notification-based system for foreign direct investments rather than screening and approval; and to increase foreign direct investments through established policies. This Law establishes the treatment to be applied to foreign direct investments.”

In line with incentives for the encouragement of Foreign Direct Investments, among some other polices and principles, employment of foreign employees in FDIs, regulated by a special regulation. Regulation on the Employment of Foreign Personnel in Foreign Direct Investment[3] (hereinafter Regulation) regulates the procedures and principles regarding to the work permissions of foreign personnel employed in FDIs. However in accordance with article 2 of the Regulation, these procedures and principles only apply to the ‘Key Personnel’ employed in the FDIs. As per article 4 of the Regulation, Key Personnel should posses one of the following features.

“a) (1) Working in the company’s senior management or executive position, (2) Managing the entire or a part of the company, (3) Supervising or checking the works of the company’s auditors, administrative or technical personnel, (4) Taking new personnel to the company or terminating the employment of those existing or making suggestions in this subjects;

any person in charge of at least one of the above fields or authorized in these matters; acting in the position of the company’s associate, chairman of the board of directors, member of the board of directors, general manager, general manager associate, company manager, company manager associate and similar positions.

b) Any person featuring the knowledge considered essential for the company’s services, research devices, techniques or methods,

c) Maximum one person in the liaison offices, who has been issued a letter of authorization by the principal company abroad.”

As per article 4 of the Regulation, a company with foreign capital, in order to be classified as special FDI, should satisfy at least one of the following conditions; (2013)

“a) the fact that the company’s or branch’s last annual turnover amounts to at least 79,8 Million  Turkish Lira, under the condition that the total capital share of the foreign shareholders amounts to at least 1.062.691 Turkish Lira,

b) the fact that the company’s or branch’s last annual exports amount to at least 1 million US Dollars, under the condition that the total capital share of the foreign shareholders amounts to at least 1.062.691  Turkish Lira,

 c) the fact that at least 250 registered personnel are employed with the company or branch within the last year, under the condition that the total capital share of the foreign shareholders amounts to at least 1.062.691  Turkish Lira,

 d) that in case the company or branch shall realize an investment, the minimum fixed investment amount foreseen shall be at least 26,6 Million Turkish Lira,

e) the fact that the principal company features any direct foreign investment in at least one more country apart from the country where its head offices are situated.”

WORK PERMIT APPLICATIONS

Work permit applications for key personnel to be employed in special  FDIs, cannot be rejected on the basis of article 14 (b) of the Law on Work Permits of Foreigners. Article 14 (b) provides Ministry of Labor and Social Security with the right to reject work permit applications on the basis of availability of a person within four weeks in the country with the same quality to perform the applied job. Applications for Work Permit can be made through Turkish representatives abroad. In the existence of residence permit valid for at least 6 months, foreigners residing in Turkey can make their applications directly to Ministry of Labor and Social Security. In the case of employment field of key personnel is irrelevant from their vocational education, Ministry do not seek any advisory opinion about the professional efficiency from relevant authorizes. Those Key Personnel are not subject to assessment procedures related to their academic and professional qualifications. In addition to the ordinary required documents for the work permit applications, in the work permit applications for key personnel, documents verifying company or branch is a “special foreign direct investment” as well as documents evidencing the foreign personnel is key personnel are necessarily should be submitted to the Ministry.   An application that is ‘duly made’ normally assessed and determined within 15 days after the day of submission of required documents to the Ministry. 15 days period may be extended for the applications of key personnel who will work within the scope of professional services.

EMPLOYMENT OF FOREIGNERS IN LIAISON OFFICES

As per article 3 (h) of the Law no 4875 on Foreign Direct Investment and article 6 of the regulation on the implementation of Foreign Direct Investment Law, “The Ministry (Ministry of Economy) is authorized to grant permits and extend such permits to companies established in accordance with the laws of foreign countries to open liaison offices in Turkey, provided that they do not carry out commercial activities in Turkey.

Within this respect, in accordance with article 4 (c) of the regulation, maximum one person in the liaison offices, who has been issued a letter of authorization by the principal company abroad, is considered as Key Personnel, under the condition that the office has brought at least 200.000 US Dollars or its equivalent in foreign currency from abroad within the last year for its activities.

For the employment of key personnel in the liaison offices (maximum one person who holds authorization letter), foreign labor quota system will not be applied  Turkish foreign labor quota system prescribes that, for every individual work permit requests, company should have at least 5 full-time Turkish employees within its workplace. However for additional foreigners to be employed in the liaison offices, foreign labor quota will be still applicable.

You may interested : Types of Work Permits

WORK PERMITS OF FOREIGN SHAREHOLDERS

Work permits regime for the foreigners within those companies with foreign capital which are not considered within the scope of Law no: 4875 on Foreign Direct Investment is regulated by the Law no: 4817 on Work Permits of Foreigners.  

Only being a capital shareholder without having authority related to the management and representation of company cannot be considered as “work” for the purpose of Law no: 4817 on the Work Permits of Foreigners.  However foreign shareholders who are taking active part in the operation of company are required to obtain work permit. In order to make a work permit application as foreign shareholder, in addition to the other eligibility criteria should be satisfied by the employers, capital share of the foreign shareholder, on the condition of not being less than 20 percent of total capital, required to be at least 40.000 Turkish Lira.

In foreign shareholder work permit application, foreign labor quota system[4] will be applied in the last six months of the granted one year work permit. Thus foreign shareholders are not required to verify that they have at least 5 full-time Turkish employees within their workplace during their initial applications.

[1] Law No. 4875,  Date of Enactment: 5.6.2003 (Published in the Official Gazette 0n 17 June 2003, No. 25141)

[2] Regulation on the implementation of Foreign Direct Investment Law (Published in the Official Gazette 0n 20 August 2003, No. 25205)

[3] Regulation on the Employment of Foreign Personnel in Foreign Direct Investment (Published in the Official Gazette 0n 29 August 2003, No. 25214)

[4] Turkish foreign labor quota system prescribes that, for every individual work permit requests, company should have at least 5 full-time Turkish employees within its workplace.

Ata Kurumsal

Ata Institutional Consulting is a leading consultancy company in its field, with expert personnel, with 12 years of experience, providing residence permit, work permit, Turkish citizenship consultancy and corporate consultancy services to foreigners. Ata Instiutional Consultancy

15 Comments

  1. Hello,

    As a foreigner, if I register a business in Turkey LLC, with capital of at least 100.000 tl and I will be the director of the company, (not only owner), Do I need to hire 5 Turkish people or to sell more than 800.000tl to get my working permit? If your answer is not, and you want to help me, I can work with you.

  2. I am a foreigner married to a Turk holding residence permit for the last 5 + years. I have %50 shares with a Turkish partner in a Limited company here. What do I need to do if I wanted to act as the General Manager of the company I’m partners at?

    Thanks in advance for the counselin!

    1. Hello,
      Thank you for your comment.

      If you would become a General Manager, adequate annotation shall be made in Articles of Association of the company.

      Kind Regards,

  3. Dear Sir/Madam,

    First of all I would like to thank you for your useful website.
    I have established a limited company in Turkey around 7 months ago. Company’s capital is TRY 250,000 and my share is 50%.

    Do I have to employ 5 Turkish citizens while applying for my work permit as General Manager of company?

    1. Hello,
      Thank you for your comment.

      Even if you are company owner or shareholder, there must be 5 Turkish employees in the company per each foreigner including yourself in order to be eligible for work permit.

      Kind Regards,

      Your thoughts are important to us. Are you satisfied with the answers we have given to your questions? Please rate us and leave a comment.Click here

  4. I hold TRP of turkey for one year I came in December on a one month touristic visa and applied for TRP on 27th December 2018. After my interview of TRP I left turkey for Pakistan on 20th January within my validity of one month touristic visa. I gave power of attorney to a friend who hold Turkish citizenship to collect my kimlak when it comes. On 13th march he collected my kimlak from PTT. Now I have plan to come turkey to do some business in Istanbul or Antalya. My first question is that I have read that after the residency you have to made entry within six months or you cannot be out from turkey more than six months and if you are outside turkey more than six months your TRP will be canceled automatically. My TRP validity written on kimlak is 27th December 2019. Please advise me that do I have to be in turkey before 20th(six months after I exit turkey within my one month touristic visa) June as I exit turkey on 20th January or I have to be in turkey before 27th may( six months according to TRP starting date).

  5. Hi, I have TRP valid till 27th December 2019. I am planning to do small business such as a small grocery store or a fast food shop. I am planning to invest around 100 thousand TL. Do I need to open a company for these two businesses and? And what other rules and regulations and how much time it will take to setup a company if needed for these businesses and what will be the cost? Do I need work permit for this?
    Regards

    1. Hello,
      Thank you for your comment.

      As a foreigner, you can establish a company in Turkey with minimum paid capital of 10.000 USD, however in order to do business activity as an owner or a shareholder, you must obtain work permit. To obtain work permit for yourself, your company’s paid capital must be at least 100.000 TL and there must be 5 Turkish citizens employed per each foreigner in the company including yourself. Establishment of a company can be finalized within one week. We provide services regarding establising a company in Turkey. You can read more about this topic and our services in article below:
      Establishing Company in Turkey

      Best Regards,

      Your thoughts are important to us. Are you satisfied with the answers we have given to your questions? Please rate us and leave a comment.Click here

  6. Hello.
    I am planning to register a company on my own as a foreigner in order to provide service to the local company. In that case, can I apply for a work permit even though I am not employing anyone else? if so, what will be the requirements? thank you so much!

    1. Hello,
      Thank you for your comment.

      As a foreigner, you are allowed to establish company in Turkey with minimum pre-paid capital of 10.000 TL. However, in order to do a business activity as an owner or shareholder, you must apply for work permit. You can only make work permit application if company’s paid capital would be 100.000 TL or more and there would be at least 5 Turkish citizens employed per each foreigner working in the company, including you.

      Best Regards,

      Your thoughts are important to us. Are you satisfied with the answers we have given to your questions? Please rate us and leave a comment.Click here

      1. Hello, can you please explain how as a owner I can hire 5 Turkish citizens, bet without director, who will sign a contract with them?

  7. Hi. I am in the process of registering a limited liability company together with a Turkish citizen – the shareholding is a 50/50 split. I will be involved in the management of the business but will also spend time out of Turkey – I think that in a year, I am likely to spend 4 – 6 months at the company in Turkey. My questions are:

    1. What are the requirements for me to qualify for a work permit as a shareholder?
    2. Should I be granted a work permit, are there restrictions on how much time (on a continuous basis) I have to spend time within Turkey in a year in order for the work permit to remain valid

    1. Hello,
      Thank you for your comment.

      You qualify to obtain a work permit as a shareholder if:
      – company’s paid capital is 100.000 TL or more
      – there is at least 5 Turkish citizens employed in the company.
      Officially there was a limit of maximum 6 months spent abroad by a foreigner who is work permit holder, after that period of time permit used to be cancelled. Although this period of time still figures as an official limit, in practise it is not put into effect towards shareholders of companies in Turkey and if you stay abroad longer, your work permit would not get cancelled.

      Kind Regards,

      Your thoughts are important to us. Are you satisfied with the answers we have given to your questions? Please rate us and leave a comment.Click here

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